ACCC chair calls for reform amid rise of AI and digital giants
19 November 2024
ACCC chair Gina Cass-Gottlieb has called for reforms to Australia’s competition laws to tackle the rising influence of digital monopolies and the complex regulatory challenges of artificial intelligence.
Marking the 50th anniversary of competition law in Australia, Ms Cass-Gottlieb said since its inception, the Trade Practices Act 1974 had promoted competition as a cornerstone of the Australian market economy.
“This legislation transformed our economy, and with it, our society,” Ms Cass-Gottlieb said, giving the keynote address at the conference hosted by Monash Business School’s Digital Lab and Department of Economics, and Monash Law School.
Chair of the ACCC,
Gina Cass-Gottlieb.
In her address, she argued the legislation, now known as the Competition and Consumer Act, needed to evolve to address the increasing dominance of large digital platforms.
“Digital platforms are serial acquirers,” she said.
“Undoubtedly, many acquisitions by large digital platforms are likely to be benign. However, there appears to be a pattern where large digital platforms acquire businesses that may evolve into effective competitors.”
To address the competitive risks, Ms Cass-Gottlieb said the ACCC had thrown its support behind the Treasury Laws Amendment (Mergers and Acquisitions Reform) Bill 2024.
The Bill would introduce a mandatory merger notification regime, replacing the current voluntary model and bringing Australia in line with its international peers.
She said the reform would address “serial acquisitions” by tech giants seeking to neutralise potential competitors.
“If passed through the Parliament, this Bill will provide the ACCC with fit-for-purpose tools targeted at identifying and preventing anti-competitive mergers,” she said.
“The ACCC is committed to the successful implementation of these reforms to ensure that transactions that may adversely affect competition are subject to adequate scrutiny based on the risks raised.”
AI and the race to regulate
Ms Cass-Gottlieb said AI posed competition issues that mirrored those in the digital market, such as the concentration of market power and the potential for price setting.
Artificial intelligence poses complex
regulatory challenges.
She warned regulators must remain vigilant to prevent monopolies from forming around AI-driven services.
However, any regulatory response should first focus on identifying gaps in existing frameworks and determining how these safeguards can be reinforced.
“The ACCC is contributing to a review by the (Department of) Treasury considering the application of Australian Consumer Law in relation to AI-enabled goods and services,” she said.
Competing for a greener future
Ms Cass-Gottlieb said competitive markets are crucial to driving the innovation and investment needed to support the transition to a greener economy.
However, she acknowledged collaboration between businesses could help achieve better environmental outcomes for those struggling to meet sustainability goals on their own.
“In such instances, competition law should not hinder businesses acting together to achieve sustainability objectives,” she said.
“From its inception, the Trade Practices Act has allowed for competitor collaborations that deliver net public benefit.”
Building on a legacy
The Act’s legacy, Ms Cass-Gottlieb said, provided an essential foundation as regulators adapt to the ever-changing demands of a digital economy.
“I do believe, while they had incredible insight, the lawmakers of 1974 could not have imagined the products and services available in our rapidly transforming global world of trade and commerce,” she said.
“There can be many forecasts for the Australian economy 50 years from now, but whatever lies ahead, I am confident our Act will continue its legacy as a cornerstone of our market economy and a strong contributor to the welfare of generations of Australians.”
In 2022 Ms Cass-Gottlieb addressed the sold-out Monash Business School event ‘Competition law in a changing economy and rise of the digital era: Roundtable with four chairs of the ACCC, past and present’.
She discussed the ACCC’s “intense focus” on the digital economy amid the ever-increasing expansion of platforms like Google and Meta and growing misleading and manipulative practices which harm consumers.